One of Japan’s biggest regional banks is keen to resume buying the nation’s bonds as interest rates creep higher, adding to a growing line of financial institutions that are weighing a return to local debt after years of investing abroad.
"When yields rise, Japanese government bonds will definitely become the mainstay of our portfolio,” said Tomoki Arai, head of markets at Bank of Yokohama. "We would like to make an entry with the 10-year yield at around 1.1%.”
Ten-year yields are now about 1%, after the Bank of Japan abandoned a policy of keeping borrowing costs near zero earlier this year as inflation takes hold in the world’s fourth-largest economy. They extended gains this week after Donald Trump’s U.S. election win triggered bond selling.
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